Question 1

In addition to investment in physical and human capital, what other public policies might a country adopt to increase productivity?

Accepted Answer

The answer of In addition to investment in physical and...

Question 2

In order to assess the level of prosperity in a nation in a given year, should we examine the level of that nation's real GDP per person, or should we examine the growth rate of that nation's real GDP per person?

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The answer of In order to assess the level of...

Question 3

The population growth rate tends to be higher in developed countries than in developing countries.

Accepted Answer

The population growth rate tends to be higher in developing countries due to factors such as high birth rates, lack of access to family planning, and lower mortality rates. In contrast, developed countries typically have lower population growth rates due to factors such as higher levels of education, access to family planning, and better healthcare leading to lower mortality rates.

Question 4

Why is productivity related to the standard of living? In your answer be sure to explain what productivity and the standard of living mean. Make a list of things that determine labor productivity.

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The answer of Why is productivity related to the standard...

Question 5

Countries with high population growth rates tend to have lower levels of educational attainment.

Accepted Answer

This is often observed as countries with high population growth rates may struggle to provide access to quality education and resources for all their citizens, particularly in rural areas. This can result in lower levels of educational attainment overall.

Question 6

At first patents might seem like a deterrent to growth because in effect they restrict the use of new technology. Yet many economists believe that patents generate growth. Explain why.

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Question 7

Some economists argue that it is possible to raise the standard of living by reducing population growth. As an economist interested in incentives rather than coercion, what kind of policy would you recommend to slow population growth?

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Question 8

A country's standard of living depends on its ability to produce goods and services.

Accepted Answer

A country's standard of living is positively correlated with its production of goods and services as they contribute to economic growth, income, and employment opportunities.

Question 9

Why does a nation's standard of living depend on property rights?

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The answer of Why does a nation's standard of living...

Question 10

The level of real GDP is a good measure of economic prosperity, and the growth of real GDP is a good measure of
__________.

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Question 11

Some data that at first might seem puzzling: The share of GDP devoted to investment was similar for the United States and South Korea from 1960-1991. However, during these same years South Korea had a 6 percent growth rate of average annual income per person, while the United States had only a 2 percent growth rate. If the saving rates were the same, why were the growth rates so different?

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Question 12

What is the difference between human capital and technology?

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The answer of What is the difference between human capital...

Question 13

Compare and contrast the population theories of Malthus and Kremer.

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Question 14

What is a production function? Write an equation for a typical production function, and explain what each of the terms represents.

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Question 15

Use the data on U.S. real GDP below to compute real GDP per person for each year. Then use these numbers to compute the percentage increase in real GDP per person from 1993 to 2012.

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The answer of Use the data on U.S. real GDP...

Question 16

The catch-up effect says that countries with low income can grow faster than countries with higher income.
However, in statistical studies that include many diverse countries we do not observe the catch-up-effect unless we control for other variables that affect productivity. Considering the determinants of productivity, list and explain some things that would tend to prohibit or limit a poor country's ability to catch up with the rich ones.

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Question 17

How do outward-oriented policies affect a nation's productivity?

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Question 18

Economist Michael Kremer found that world growth rates fell as population increased.

Accepted Answer

Michael Kremer actually found the opposite - that world growth rates increased as population increased. This is known as the "population growth paradox."

Question 19

How would an economist typically assess the extent of economic progress in a nation?

Accepted Answer

The answer of How would an economist typically assess the...

Question 20

In countries where women are discriminated against, policies that increase the likelihood of career success and educational opportunities for women are likely to decrease the birth rate.

Accepted Answer

When women have access to education and career opportunities, they are more likely to delay or limit their childbearing. This is because they prioritize their goals and aspirations, which may include pursuing higher education or building a successful career. Additionally, women who have access to birth control and family planning services are better able to plan and space their pregnancies. All of these factors combined can lead to a lower birth rate in countries where women face discrimination.

Quiz 17: Production and Growth